Rethinking Renovation for Singapore's Hotel Industry

Whilst upscale and mid-tier hotels have in instances seen their RevPAR increase this year, economy and tired assets have experienced in turn, additional pressure to stay competitive in this market.

18 Oct 2016

By Helena Gomes

Rethinking Renovation for Singapores Hotel Industry

Singapore’s hotel industry has benefited from a healthy growth in demand and occupancy for a number of years. Yet more recently, we have seen a steady decline in demand.

Whilst upscale and mid-tier hotels have in instances seen their RevPAR increase this year, economy and tired assets have experienced in turn, additional pressure to stay competitive in this market.

Earlier this year, The Singapore Tourism Development Fund announced an investment of S$700M over the next five years, with a view of significantly boosting tourism levels and positioning Singapore for longer term tourism growth. This is a much welcomed support for hoteliers across the country. But hotels cannot rely on this alone, and instead, should focus on what they can do to ensure they are best placed to gain competitive advantage.

Guest Experience - First Impression Counts

Brand reputation has never been more important than in today’s competitive market. Whether it’s a boutique hotel forging a unique identity, or a chain of hotels that must consistently reflect brand qualities across its portfolio. First impressions can mean everything and the hotel lobby is becoming an increasingly important way of conveying brand and acting as a ‘shop window’ for what is to come.

For this reason, we are seeing more hotels invest in major structural upgrades to hotel lobby space and the arrival experience which can play a huge role in repositioning an aging property.

However, hotels need to pay closer attention to the guest experience to ensure the best possible outcome throughout and after the renovation.

Room for Improvement

Tired or outdated rooms and amenities are a common complaint for consumers. As a result, keeping hotel spaces updated is important in building and maintaining a strong customer base. The industry standard is approximately 7 year cycles in which to renovate rooms. However, we’re seeing a trend towards hotels gaining competitive edge by carrying out room renovations every 2-3 years.

This can be an extremely costly exercise and often the return on investment can be difficult to determine. As a result, more hotels are opting for a more selective renovation approach, rather than extensive upgrades. If applied in the right way, rooms can appear to have received a significant upgrade, without the associated costs. Activities can include replacing only soft furnishings, or for example, re-upholster, replacing table tops, rather than 100% replacement.

The Technology Trend

The implementation of technology within hotels is possibly one of the most overlooked opportunities within the sector. Slow and sometimes paid Wi-Fi is another common customer complaint, yet many hotels have still not effectively adapted, and only a small number of hotels are going beyond and leading the way to a more connected experience for customers.

There are endless new ways to impress using technology enhancements; from 3D entertainment systems and tablets, to the application of smart personalized controls and motion sensors. Such investments can be a real differentiator in a market that has historically been relatively slow and conservative on technology uptake.

Looking Forward

As Singapore prepares itself for an influx of tourism, those that are recognizing the customer expectations and the opportunities that come with upgrading their space - will stay ahead of the competition.

Paramount to success is partnering with hospitality specific teams that understand the industry trends to optimize investment and maximize returns through a strategic approach to renovations and upgrades.

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